Niger becomes a member of ATI and received ATI backing on a landmark $200 M equivalent commercial financing deal - African Trade Insurance Agency

Niger becomes a member of ATI and received ATI backing on a landmark $200 M equivalent commercial financing deal

  • Niger became the 16th African member country to join ATI with a shareholding of US$12.5 million.
  • The European Investment Bank provided a grant to cover the equity investment as part of a US$37.5 million package to fund the shareholding of three prospective West African countries.
  • Niger also benefited from ATI’s backing on its first international commercial financing of $200 million equivalent in EUR with a tenure of 10 years. The loan will be used to reprofile the country’s existing short-term expensive domestic debt.

NAIROBI, 3 March, 2020 – The African Trade Insurance Agency (ATI) welcomed into membership the fourth West African shareholder continuing the institution’s tremendous expansion in the region. Alongside membership, ATI, together with reinsurance from the London market, supported Niger to raise debt from the international financial markets resulting in a loan of $200 million equivalent in EUR. Deutsche Bank AG was sole mandated lead arranger and original lender with Rothschild acting as financial adviser.

The Government of Niger is using the funds to support the country’s social and economic development agenda by reprofiling its short-term domestic public debt obligations. Niger’s ability to attract this long-term (10-year final maturity) financing at a competitive rate hinged on ATI’s insurance and the reinsurance support of the London market. With the financing in place, Niger is repaying more expensive and shorter-term T-bills and obligations with longer-term and less costly financing, which creates a more sustainable debt management outlook.

This initiative is in line with observations from the IMF captured in its July 2019 country review, which noted that a debt reprofiling operation would usher in a period of more stable funding for Niger.

In addition to the support of the sovereign, other sectors are also projected to benefit from ATI’s support, especially international trade, where ATI can cover the non-payment risks of exporters and suppliers to help exporters expand into new markets and to help local industries obtain the inputs they need to grow.

Banks will also be able to lend more to local businesses. This intervention helps create greater access to credit in order to strengthen the economy.

ATI is a multilateral and pan-African institution that provides insurance guarantees which helps its African member governments attract investments and spur trade with increased access to credit. In 2019, ATI insured transactions across Africa valued at US$6.4 Bn reflecting a growing demand for ATI’s products from African governments and international financial partners.

In order to give prospective African member countries more options to finance their shareholding, ATI has established partnerships with the African Development Bank, the European Investment Bank (EIB) and Germany’s Development Bank – KfW to provide grants or concessional lending to prospective African member countries.

QUOTE from John Lentaigne, Ag. CEO, ATI

“Niger provides a great example of the kind of valuable support that ATI has been able to give its member countries in the last few years. ATI is proving that it is a partner in Africa’s development because we see our role as providing a guarantee for our member governments to ensure that they have a broader range of options to fund their development. Niger’s full membership in ATI has progressed at record speed and we are delighted to have concurrently been able to support the government in strategic financing.”

QUOTE from Maryam Khosrowshahi, Head of Sub-Saharan Africa Coverage & CEEMEA Sovereign Debt Capital Markets, Deutsche Bank AG  

“Deutsche Bank was pleased to be selected as Niger’s partner of choice to arrange the country’s first international financing. The transaction was made all-the-more satisfying in knowing that the savings achieved from the debt re-profiling exercise would support important social development investments in Niger.”

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